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Despite Hurricane Ike shutting down 17% of the US oil production capacity, crude fell below $ 100 on more bad news about the financial markets. Merrill Lynch and Lehman Bros. are going under and AIG needs $ 40 billion from the Fed to survive. So, the Dow is taking a big hit. Apparently energy stocks are headed south.NY Times on crude oil price. Thus, the good news on crude is simply bad news on the economy -- no enthusiasm about oil supply, just the realization that without economic activity, oil demand is going to plummet.

Unfortunately, this not so good news was evident in July. Its just taken a while to realize. ELP Blog post 7-15

At least some folks agree that this is a short-term reduction in energy stocks and the price of crude. One analyst, Byron King, considers the energy industry a bull ready to charge, forseeing future rises in energy prices."This time last year -- September 2007 -- a barrel of oil cost about
$80, and rising ... Today, a barrel of oil is trading for about $107,
or about a 33% increase year over year. That's no plunge ... the recent
price retreat is not a plunge. It's just a correction within a long
trend of rising prices for energy...Almost all of the world's largest oil
fields were discovered over 30 years ago and have been lifting crude
oil for 30, 40 or more years. So crude oil output from many of the
world's oil fields is either flat (such as in Saudi Arabia) or falling
(such as in Mexico). Even Russian oil output is dropping this year. No
less an authority than the head of Gazprom recently stated that oil
should sell for $250 or more per barrel."He also points out that the world is more hostile to Western oil
companies: "As recently as the late 1970s, Western oil companies
controlled well over half of the world's oil production. But now the
NOC's [state-owned national oil companies) such as Saudi Aramco,
National Iranian Oil Co., Kuwait Oil Co., Petroleos de Venezuela,
Petroleos Mexicanos (Pemex), etc. control over 85% of the world's oil
resources. Western majors control about 7% of the world's oil resource
base." MarketWatch